Minimum Payment
GeneralGlossary term
Definition
The smallest amount you must pay each month to keep the account in good standing, typically 1-3% of the balance or $25-35, whichever is greater. Paying only the minimum results in expensive long-term interest.
Related terms
- Statement BalanceThe total amount owed on a credit card at the end of the billing cycle. Paying this amount in full by the due date avoids interest charges and maximizes the grace period.
- Credit Card DebtMoney owed on credit cards that carries over from month to month, accruing interest. The average American household carries over $6,000 in credit card debt at 20%+ APR.
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